Property Market Update

CORELOGIC’S HOME VALUE INDEX CONTINUES TO LOSE STEAM AS THE CASE FOR HIGHER INTEREST RATES MOUNT

BY TIM LAWLESS,

HEAD OF RESEARCH, CORELOGIC

The residential property markets of Australia’s two largest cities have hit their first quarter of negative territory since the extended lockdowns of 2020.

Sydney and Melbourne’s market slowdown has seen CoreLogic’s national Home Value Index (HVI) continue to lose steam through April. Housing values are still rising at the national level, however the 0.6% monthly rate of growth is the lowest reading since October 2020.

Sydney and Melbourne, which have the heaviest weighting in the HVI, were the main drag on the headline growth rates. Sydney housing values recorded the third consecutive month-on-month decline, down 0.2%, while Melbourne values were flat (-0.04% when taken out to the second decimal place). Technically values are down over three of the past five months in Melbourne. Hobart also recorded a negative monthly change (-0.3%), the city’s first monthly fall in 22 months.

CoreLogic’s Research Director Tim Lawless says the weakening state of the market has taken the rolling quarterly trend into negative territory across Sydney and Melbourne for the first time since these cities were in the midst of extended lockdowns in mid-to-late 2020.

Demonstrating the diversity in housing conditions across the broad regions of Australia, half of the capitals are still recording a monthly growth rate above 1%. Adelaide, at 1.9% growth in April, led the pace of capital gains, followed by Brisbane (1.7%), Canberra (1.3%) and Perth (1.1%).

Although monthly growth rates remain high in these markets, Mr Lawless warns the trend rate of growth is easing in most of these areas as well. Based on rolling quarterly change, Brisbane dwellings moved through a peak rate of growth in December last year at 8.5%, slowing to 5.7% over the most recent three month period. Similarly, Adelaide moved through a peak in the trend rate of growth in January at 7.4%, reducing to 5.4% in April.

Perth and Darwin are the exceptions, where the rolling quarterly trend has gathered some steam since late last year. Perth housing values were up 2.4% over the three months ending April compared with a recent lull through late last year when the quarterly trend fell to just 0.4%.

“A rebound in migration rates as state and international borders re-opened could partially explain the renewed exuberance, along with persistently low advertised stock levels and strong economic conditions,” Mr Lawless says.

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